Wholesaler fury at AstraZeneca drug distribution deal

Wholesalers reacted angrily yesterday to the news that AstraZeneca has followed recent moves by Pfizer with an exclusive distribution system for its medicines in the UK.

AstraZeneca said it had appointed UniChem, Alliance Boots' wholesaling division, and Celesio's AAH Pharmaceuticals as its agency partners to deliver medicines directly to pharmacies, doctors and hospitals.

The American giant Pfizer started the trend last month when it began selling products exclusively through UniChem, prompting the Office of Fair Trading to launch an investigation into the market for distributing medicines.

AstraZeneca said it had made the change "to simplify and modernise the existing supply arrangements which have been largely unchanged for many years". But Phoenix Healthcare Distribution, the UK's third largest drugs wholesaler, said the decision would inflict "serious damage" on its business.

"This sets another precedent in the now fast changing distribution market, which will further undermine all competition, choice, and efficient quality of service that all pharmacies, dispensing doctors and hospitals currently receive, and from which the NHS benefits," Phoenix said. "By adopting this approach, AZ has effectively decided to marginalise and ignore all areas of the market that currently choose not to deal with their appointed distributors."

Phoenix had been in negotiation with AstraZeneca after the Anglo-Swedish group announced it was reviewing how its medicines reached patients. It is now accusing the drug company of wanting to manipulate the market. "A narrow distribution channel obviously makes it easier to consolidate sales data and thus potentially control and influence the market," Phoenix said.

Chris Brinsmead, AstraZeneca UK's company president, said it believes its customers, such as pharmacists, "have an increasingly important role to play in advancing patient care". He said: "Simplifying our supply and delivery service will help us get closer to all our customers, so we are better placed to anticipate their future requirements and ultimately provide a better service." The new system, which will be implemented in the summer, replaces its traditional system of using multiple wholesalers.

The OFT is to report back by the end of the year. Pfizer argued it needs the new system to stamp out counterfeit drugs but critics say the real aim is to fight parallel trade, a legal practice in Europe whereby medicines are imported for resale into Britain from countries where they are cheaper. The NHS spends more than £10bn a year on prescription medicines.